Breakout May Occur This Week
by Sam Collins 12/14/09
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Despite another day of very low volume, on Friday there was enough economic news to move stocks higher. The Commerce Department announced that retail sales in November rose 1.3%, which had some impact on the retail group. And the University of Michigan/Reuters preliminary consumer sentiment index for December came in above expectations.
Consumer stocks benefitted most from the economic reports, and Dow component Home Depot (HD) rose 1.8%. The S&P 500 (SPX) gained 0.37%, mostly on buying in consumer discretionary stocks.
The U.S. dollar was a beneficiary of the reports, as well, surging against a basket of other currencies. The dollar rally sent the euro to its lowest level in two months, dropping it briefly to under $1.46.
Commodities and producers were sharply lower, hurt by the rising dollar. And technology stocks were also lower. Cisco (CSCO) fell 0.7%, Intel (INTC) was off 1.2%, and National Semiconductor (NSM) fell 3.6% despite an increased quarterly profit that beat analysts' estimates. The tech-heavy Nasdaq (NASD) fell 0.03%.
At the close, the Dow Jones Industrial Average (DJI) was up 66 points to 10,472, the S&P 500 rose 4 points to 1,106, and the Nasdaq fell a point to 2,190.
The NYSE traded just over a billion shares with advancers ahead of decliners by about 2-to-1. On the Nasdaq, 511 million shares traded, but advancers were only slightly ahead.
For the week, the Dow gained 0.8%, the S&P 500 was unchanged, and the Nasdaq fell 0.2%.
On Friday, crude oil for January delivery closed 67 cents lower at $69.87 a barrel, and the Energy Select Sector SPDR (XLE) rose 3 cents to $55.53.
Gold (December contract) fell to a four-week low at $1,110.80 before the final fix at $1,119.40 an ounce, down $6.30. The PHLX Gold/Silver Sector Index (XAU) closed at $172.44, down $3.70, and below its 50-day moving average for the second time in a week. Support for the XAU is now at the bullish support line at $160.
What the Markets Are Saying
The indices are still bouncing around between Dow 10,230 and 10,450, and S&P 1,085 and 1,115, with little to indicate a change before year-end. Therefore, let's take a moment to review the overall market situation.
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